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Archive for July, 2017

September corn closed unchanged at $3.74 ¼ and December 17 corn closed up ¼ at $3.88. August beans closed up 6 at $10.00 ¾ and November 17 closed up 5 ½ at $10.13. September wheat closed down 1 ¼ at $4.81 and July 18 closed up 1 at $5.45 ¼. Crude oil closed up $.64 at $49.81.

Weekend rains caused corn to gap sharply lower to begin the week. However, weaker crop conditions and changing weather forecasts resulted in a big swing on Tuesday and overhead gaps were filled, but a sharp decline followed to post a key reversal lower on the day. The balance of the week was unpredictable and some traders moved to the sidelines. It’s widely believed the market has already priced in a 165 BPA yield, and possibly lower. The next WASDE report is due August 10th. This report is expected to lower the yield, but what they will do with exports is a toss-up. Export sales have fallen below the average “needed” level in four out of the last five weeks and using a “normal” 90 million bushels of old crop sales carried into new crop, we may be hard pressed to achieve the USDA’s 2.225 billion bushels target. Weekly crop conditions as of July 23rd fell 2% to 64% good/excellent. This was expected by the trade. Corn was 67% silked, right at the 5-year average. Corn was 8% in the dough stage versus 13% on average. Popping up as an area of concern this week was central Iowa. They missed some mid-week rains and the market gleaned support from the non-event. The latest drought monitor as of July 25th showed the drought had expanded into Iowa and Nebraska. The drought monitor showed 34.7% of Iowa was in some degree of drought, up from 22.2% in the previous week. Weekly old crop export sales were the lowest of the marketing year at 3.6 million bushels. Total old crop commitments, with six weeks left in the marketing year, are 2.217 billion bushels. The USDA is carrying exports for this year at 2.225 billion bushels. “Normally” there are roughly 90 million bushels of old crop sales rolled into new crop. New crop export sales were good at 19.2 million bushels, bringing total commitments to 157.5 million bushels, and the lowest for this time of year in the last seven years. Last year, we had 281.8 million bushels on the books for new crop. BAGE left their Argentine corn production forecast at 39 mmt with harvest nearly 63% complete versus 58% on average. The USDA is using 41 mmt, and if current yields hold up, the USDA may be the closer to the final production number. Weekly ethanol production fell 14,000 bpd to 1.012 million bpd. Ethanol stocks were down 600,000 barrels to 21.5 million barrels. Crush margins were unchanged at 6 cents per gallon. Brazil is delaying for 30 days making a decision on whether or not to implement a 17% import tax on ethanol. The US provides the majority of their ethanol imports, supplying 270 million gallons in 2016. Brazil’s ethanol imports are up 330% this calendar year.

November soybeans followed the same early week pattern as corn, gapping lower on Monday, filling the overhead gap and posting a key reversal lower on Tuesday, then recouping losses into the weekend. In general, it felt like a slow end to the week with some moving to the sidelines to wait to see what the weekend would hold. The market has already incorporated a soybean yield closer to 46 BPA than the USDA’s July number of 47 BPA. Soybean crop ratings as of July 23rd fell more than expected, down 4% to 57% good/excellent. This was the fifth straight week of declining ratings. 69% of the soybean crop was setting pods versus 67% on average. Setting pods was reported at 29% compared to the average of 27%. Weekly export sales were decent at 11.1 million bushels. Total old crop commitments rose to 2.229 billion bushels, staying well above the USDA’s 2.10 billion bushels projection. Assuming we carryover 75 million bushels of old crop sales into the new marketing year, the August WASDE report will likely need to raise old crop exports 40 million bushels. However, there are ideas this year we could see a record 85 million bushels rolled into new crop. New crop sales at 19.6 million bushels were the second highest of the marketing year and brought total commitments to 221.4 million bushels. This is still the lowest level of new crop sales for this time of year in the last ten years. Last year we had already booked 361 million bushels of new crop sales. It’s reported that non-Chinese buyers are behind on purchasing soybeans, favoring spot purchases instead. The courts ruled this week that the EPA didn’t have the authority to cut RFS volumes based on demand or infrastructure. The US Appeals Courts said the EPA had incorrectly interpreted a part of the 2005 Energy Policy Act. Soybeans benefited the most from the ruling. The EPA will not review the decision.

Egypt tendered for wheat marking the third straight week they have looked for more supplies. There was no US wheat offered again as it is not competitive on a price standpoint by about $10/ton. If you add in the additional freight costs then the US is really not in the same ballpark as the Black Sea region which has won all of the business in these recent tenders. The Wheat Quality Council led a wheat scouting tour through North Dakota. The final results were an average of 38.1 bpa versus last year at 45.7 and the 5 year average of 46.8. This is no surprise given the extreme drought conditions seen in the western part of the state. Many people criticized the tour for not incorporating the fields that were baled or abandoned. However, the goal of the tour was to capture yield on what was there and not to guess at acreage, abandonment or production.

September corn closed down 8 ½ at $3.68 ¾ and December 17 corn closed down 8 ½ at $3.82 ¼. August beans closed down 16 at $9.81 ½ and November 17 closed down 17 ¼ at $9.92 ¾. September wheat closed down 14 ¾ at $4.74 and July 18 closed down 11 ½ at $5.41. Crude oil closed up $1.51 at $48.02.

It was “night and day” in the corn market, as the bean condition report surprise from Monday initially gave all the ag markets a strong bid on the open. Gains quietly melted away through the night, and the markets actually turned lower by daybreak, putting corn trade back in a defensive posture. The funds were viewed net sellers of 15,000 corn today, as they work to get back to flat after briefly venturing out on the long side of corn. The turn toward a cooler forward weather outlook has zapped a decent chunk of risk premium from the corn market. Indeed, much of the Midwest was dry Monday into Tuesday AM, with cooler than normal temperatures in a large part of the region. Some rains were noted in a small dot on the MN/SD border, along with a smattering in SE MN. A critical rain event still appears to be in the cards for the balance of this week, which will ease crop stress in a number of key spots. Corn in the pollination stage of development should benefit from the rain, but areas that have low soil moisture and see only light rain will need follow-up rain soon or the kernel filling process will suffer. The question going forward will be just how much damage was done on the corn that pollinated amid last week’s hot/dry. It could be a while before we have an answer.

The soybean market was unable to hold its overnight gap higher and instead reversed lower closing with an outside day down as the volatile soybean trade continues. A turn from hot and threatening weather in general to a cooler and less threatening weather forecast (including a well-placed rain event forecasted this week) was enough to overshadow the larger than expected drop in soybean condition ratings yesterday afternoon and as the rally stalled out the longs hit the exits, hard. Soybean yield potential can still improve with favorable conditions going forward. The outside day is a negative tech signal that could carry for a test of support at $9.85 November initially and then the open gap at $9.60 although if this week has reminded us anything it is to be careful reading too much into technical signals this time of year as weather rules all.

We saw a strong start to the night across the entire grain complex, led by soybeans. This pulled corn and wheat along with it early, but neither market was able to hold that early strength. Spring wheat conditions came in about as expected, so maybe the strong overnight start there was just follow through from its big bounce off its lows during Monday’s session. Trade turned more defensive during the day, especially after moving through Monday’s lows. The Wheat Quality Council kicked off their annual hard spring wheat and durum tour this morning in Fargo, and early reports from some of the scouts canvassing southeastern North Dakota were although yields were below average, they were not as bad as initially feared. One leg of the tour actually estimated yields this year to be better than last year – but below the routes five year average. They pointed out that the wheat was shorter than normal, and they expect the crop to worsen as they move west.

We have the perfect conditions for all kinds of disease in corn and soybeans. Mercer Agronomy staff has been scouting many fields and has been finding Gray Leaf Spot, Northern Leaf Blight and Common Rust in corn fields. Bean fields we are finding Sceptoria Brown Spot, Sudden Death already, and Frogeye is starting to show up. There are probably more diseases out there that need to be identified with your Mercer Landmark agronomist. They can also help you to make a decision on a treatment and timing of that treatment.

Insects are becoming plentiful in corn and soybeans. Japanese Beetle, Corn Rootworm and Brown Stink Bug are some of the insects we have been seeing in beans. Insects in corn have been Corn Rootworm, Japanese Beetle, and others. It is very important to scout your fields once a week for changes in the field. Some of our fields have the potential for very good yields in corn and soybeans. Let Mercer Landmark help you make those tough decisions on a treatment for your acres.

September corn closed down 11 ¼ at $3.79 ¾ and December 17 corn closed down 11 ¼ at $3.93 ½. August beans closed down 4 ¼ at $10.09 and November 17 closed down 4 ¾ at $10.22 ¼. September wheat closed down 6 ½ at $4.99 ¼ and July 18 closed down 6 ¼ at $5.58. Crude oil closed down $1.15 at $45.95.

What a week for corn. How many ways can you describe and talk about the weather? A lot it seems. It is a crucial element driving prices, but it does get old after eight or more weeks discussing it. Weather has been the market driver for quite some time and there doesn’t seem to be an end in sight. Funds are carrying a small net long position and seem keen to support their position by buying breaks. Until there is a distinct change in the weather, they may likely continue their strategy. However, the caveat is with improving weather, they may exit their longs and exaggerate any move to the downside. Putting the weather topic aside (it will change by the time this is published), there is little to really drive the market. The monthly crop report is behind us, but weekly crop conditions will be influential. We are playing a supply concern game, not demand. Crop conditions as of July 16th fell 1% as expected to 64% good to excellent. This is just 1% behind the 10-year average, but the lowest in five years for mid-July. Significant changes were in Iowa where conditions dropped 6%, and in North Dakota and South Dakota where each fell 7%. A corn yield of 165 BPA is the popular number currently thought to be traded in the market. As of July 16th, corn was 40% silked versus 47% average. This has added concern by pushing more of the crop’s pollination timing into a later (hotter) than normal period.

Weekly corn export sales were above expectations for old crop at 18.4 MB. Total old crop commitments are 2.214 BB compared to the USDA target of 2.22 BB. New crop sales were disappointing at just 8.3 MB. Based on the small new crop sales numbers, it doesn’t seem customers are that concerned with sourcing supplies in the upcoming year with huge South American production and their competitive pricing. There has also been chatter about US corn sales being switched to Brazil.

Soybeans stair-stepped their way higher this week after crop conditions declined and the US dollar fell. The US dollar is down over 9% since the beginning of the calendar year. If weather patterns change to bring more moisture into the upper Midwest, the level of risk premium in the market may be reduced. Soybean conditions as of July 16th were the lowest in five years, down 1% to 61% good/excellent. Weekly changes were as follows: Iowa down 4%, Kansas down 5%, North Dakota dropped 7% and South Dakota was 5% lower. They are expected to fall 1%-3% on the report as of July 23rd. As of July 16th, 52% of the soybeans were blooming versus 51% on average and 16% were setting pods versus 13% on average. The June NOPA Crush Report released July 17th was 138.1 million bushels, much less than the 143.1 million expected by the trade. This is down 5% from last year. The large decline was attributed to processor downtimes during June. Weekly export sales for old crop were the best in seven weeks at 15.1 MB. This brings total commitments to 2.218 BB. The USDA’s outlook for 2.1 BB has already been surpassed and the carryover of sales from this year to next is expected to be in the 75 MB area. New crop sales were stellar at 55.9 million bushels, the highest so far this year. Much of the new crop sales were attributed to China’s trade delegation signing new frame contracts this month.

September corn closed up 8 ½ at $3.91 and December 17 corn closed up 8 ½ at $4.04 ¾. August beans closed up 13 ½ at $10.13 ¼ and November 17 closed up 14 ½ at $10.27. September wheat closed up 2 ¾ at $5.05 ¾ and July 18 closed up 2 ½ at $5.64 ¼. Crude oil closed up $.73 at $47.32.

Corn maintained its winning ways, and in a much more confident fashion, too, finishing $.08 higher by days’ end. Corn started the day with modest gains and never really faltered much, though the market did find willing sellers at times, particularly near the days’ highs. The funds were viewed buyers of another 10,000 contracts today, which would take their net length in corn up to an estimated 35,000. Precip missed the NW corner of Iowa (where it was desperately needed), instead impacting S MN (spotty coverage), S WI (where they really didn’t need any), and dry N IL (yes, this was beneficial). Meanwhile, hot/dry weather continued in the driest areas of Western Corn Belt, likely continuing to stress crops in these areas. The balance of the Midwest is expected to make due, surviving off subsoil moisture. 6-10 day maps made an interesting turn, removing some of the extreme dryness from the outlook. Export Sales this morning actually weren’t awful. Old crop business of 466,500 MT and new crop sales of 212,100 MT easily topped subdued expectations of 300k to 500k mt total.

The soybean market made a corrective low and reversed last Friday and has been working its way higher since as the chart is now poised for a challenge of the recent highs. Taking out that recent high would be significant. Weather continues to be the key driver to the recovery in prices with hot and dry conditions in the western belt and plains negatively impacting production potential and forecasts are not showing any meaningful relief for a significant portion of our soybean growing area. Not all is bad for the US crop with plenty of good soybeans particularly from the central to eastern belt and the delta. Over the past 4 weeks, funds have covered their short position and are now likely a small net long and adding. Weekly soybean export sales came in better than expected at 1.9 mmt combined although this report included the 1.3 mmt new crop frame sale to China that inflated the total. Still, the old crop sales were stronger than expected at 410 mt which was up 80% from last week and up 61% from the 4-week avg.

The wheat markets were followers of the corn and soybeans, with the winter wheat and spring posting modest gains. Spring wheat continues to get support from the hot, dry conditions in the Dakotas. The winter wheat harvest is about finished leaving it largely immune to further weather problems. Wheat export sales at 24.6 million bushels were much better than expected and year-to-date sales are above a year ago. Spring wheat contracts remain above key moving averages with September’s RSI at 64.35. Harvest in the Dakotas is about two weeks away. September SRW and HRW contracts stayed under the 20-day averages but above other averages.

September corn closed up 5 ½ at $3.82 ½ and December 17 corn closed up 5 ½ at $3.96 ¼. August beans closed up 10 ¼ at $9.99 ¾ and November 17 closed up 10 ¾ at $10.12 ½. September wheat closed down ¾ at $5.03 and July 18 closed up ½ at $5.61 ¾. Crude oil closed up $.73 at $47.32.

Corn market price action played out very similarly to yesterday. An early double-digit rally could not hold itself together over a long trading session. Yet the market also did not completely fall apart either. In fact, the day session lows did not delve quite as deep, nor did the settlement retreat quite so far from the highs. The funds were viewed buyers of another 10,000 contracts, which would take their net length in corn up to an estimated 20,000. Markets continue to trade with the various model runs and mid-day update releases. None of the driest parts of the Midwest received significant rain Tuesday. Wednesday found some showers in a forlorn corner of SW ND/NE SD. Radar maps showed a system advancing across E SD into S MN in the afternoon.

The soybean market closed higher on the day as uncertainty in the weather outlook continues to support prices in an otherwise light volume and light news day. There isn’t too much to say that hasn’t been repeated over and over – we are in a weather rally and trying to break the hold of an otherwise longer term bear market based on supply side statistics. The market remains concerned by the heat in the weather forecasts and for crops that don’t have adequate moisture during this timing they are in harm’s way so we are adding some production risk premium back in to prices. At the end of the day, the US and Global soybean supplies are more than adequate and will serve as the bucket of cold water to stop the rally from getting carried away unless the weather situation severely deteriorates but that does not appear to be the case at this time. Until we get a better look at how this weather plays out the market should remain defensive.

Trade across the complex overnight was mixed, with Mpls once again leading the way. Similar to the price action from Tuesday, trade would start to turn late morning. The difference today was it was the Mpls market that led the declines, with Chicago holding better than KC. With limited fresh news around the main focus was on weather. The western belt and northern plains are going to see very hot temps over the next few days, and that thought process was thought to keep Mpls stronger than Chicago and KC. However, Spring wheat crop ratings are already only at 34% G&E vs 69% last year and the crop is now rated at 41% P&VP. Maybe it might be getting too difficult to anticipate the crop getting too much worse in the ratings despite the continued hot and dry weather forecasts. The thought process will soon, if not already be shifting to what kind of crop will Canada see as they are beginning to develop similar weather problems. A larger than expected reduction up there will change the balance sheet again and that could be enough to ignite the next rally.

With weekly rain accumulations and high humidity, we have truly put together “the perfect storm” for foliar diseases riddling both corn and soybeans throughout our area. While scouting over the last few weeks I have encountered several diseases throughout Northwest Ohio. Below I have listed pictures and descriptions of diseases I have come across thus far.

Currently Mercer Landmark is lining up aerial fungicide applications for corn, as well as ground applications for both corn and soybeans. Make note of what fields are continuous corn or soybeans as well as the disease package on your hybrids/varieties to prioritize a scouting list.

Grey Leaf Spot-
•Narrow/rectangular brown/grey spots that run parallel to leaf veins, reaching up to 1.5-2 inches in length.
•Fungus survives over winter on corn residue and soil surface. Spores are then splashed or wind-blown onto leaves of new corn crop.
•Infection occurs during prolonged 75°-85° humid days with heavy dew and overcast.
•Corn planted late will experience initial infection earlier, resulting in higher disease levels and yield reduction.

Common Rust-•Pustules appear on upper and lower leaf surfaces. Brown-reddish brown elongated shape, scattered on leaf.
•Prefers 61°-77°, can be observed early in the growing season. Cool evenings with heavy rust lead to severe rust outbreak on susceptible hybrids.
•Rarely causes significant yield loss in Ohio. “Estimates from Wisconsin claim it takes 162 pustules/leaf to see a 1% severity.”

CURRENT SOYBEAN DISEASES

Septoria Brown Spot-
•Small brown spots occurring on both surfaces of lower leaves.
•Splashing rain moves spores from soil surface to lower leaves, then moves up the canopy.
•Thrives when weather is wet and warm for an extended period of time.
•More common in fields with continuous soybeans and minimum tillage.

Bacterial Blight-
•Brown angular lesions surrounded by a yellow ring or halo, that may have a water-soaked appearance. As lesions age they turn dark brown and fall out of the leaf tissue.
•Bacteria survives in soybean residue and seed, and enters the plant through wounds caused by equipment or weather events (heavy rain, hail).

Frogeye Leaf Spot-
•Small, dark spots on leaves that eventually grow to about ¼ inch. Centers of lesions become grey to brown with a reddish purple margin.
•Stems and pods can also be affected, severly infected pods results in infected and discolored seed.
•Infection occurs more readily in younger leaves, meaning we see it more in the upper canopy. Development is favored by warm, moist weather, and can be dispersed by wind or splashing rain.

September corn closed down 1 ¼ at $3.75 and December 17 corn closed down 1 ½ at $3.88. August beans closed down 4 at $9.85 and November 17 closed down 4 at $9.97 ½. September wheat closed down 4 ¾ at $5.06 and July 18 closed down 3 ¾ at $5.65 ¼. Crude oil closed down $.52 at $46.23.

Old and new crop corn closed a little lower to largely stay under key moving averages. Farmer selling slowed after active sales last week. The drop in futures following last week’s USDA report had farmers holding off on additional sales. Hot weather is expected this week, which could affect pollinating corn. Much of the Midwest corn is at or near the pollination stage but for many replanted fields it will be about two weeks to reach that stage. USDA crop progress showed a 1% decline to 64% good/excellent as was expected, although the crop was rated 76% good/excellent last year. The drop in Friday’s open interest indicated some short covering contributed to Friday’s higher market. Weather remains supportive with hot conditions expected next week, but gains may be capped by USDA showing the world has plenty of grain.

It was a two-sided session for soybeans and products today with a lower settlement at the end of the day as a surprisingly bearish NOPA crush report and mid-day weather models holding moisture in the near-term outlook dragged on prices. While we struggled to rally the market was not able to break very much either as the forecasts maintain extreme heat for the west and plains pushing into the Midwest and the trade knows crop potential is backing up in areas where rains have missed or been too light. Rainfall totals and coverage will be very closely monitored this week. Another reason for the hesitant trade is anticipation for the crop progress report which can be used as a gauge for funds and spec money and as we’ve seen over recent weeks, the impact of these money flows on price action can be significant. The crop progress report showed soybean conditions -1 to 61% gte with 52% of the crop blooming compared to 18% last week. The states that show the most deterioration are IA -4, KS -5, NE -3, NC -4, ND -7, OH -3, SD -5, and WI -3 while the states that show the most improvement are LA +2, MI +3, MS +2, MO +3 and TN +3. The USDA didn’t show their work but the gte rating being down only 1% seems generous? While the overall conditions are not horrible, my takeaway is that the crop continues to trend lower.

The recent general theme across the wheat complex has been for Mpls to gain on both Chicago and KC, and that trend held true again today. With the SRW and HRW wheat markets no longer in weather markets, and a balance sheet the way it is, it makes those markets much tougher to rally even with strong gains coming out of Mpls. With funds a small net short in Chicago, any additional weakness this week will continue to put the KC wheat market on the defensive more than the rest of the complex. Condition reports this afternoon showed more deterioration in the Spring wheat crop, and with another jump of 2% in the P&VP category, this should be enough to keep Mpls stronger than Chicago or KC, with harvest more than 75% complete. Hearing that across parts of Kansas that had late frost and that big snowstorm have yields not matching how well the crop looks, meaning that there indeed was some damage done to the crop in those areas.

With much of the area corn entering into reproductive phase scouting should focus on management of leaf diseases. Be sure to contact your Mercer agronomy specialist to assiist in scouting.

The majority of our area has experienced excessive moisture for much of the spring and this has resulted in our crop having inconsistent growth stages within a field. Tassel/silk in corn is likely to occur over several days or even weeks if replant was needed.

Fungicide applied according to labels can be used on corn with full crop safety along with labeled deposition aids such as Interlock®. Surfactants, oils and certain fertilizer additives have been associated with a condition called arrested ear syndrome. Those products must be avoided until full silk is expressed.

Below shows Common Rust which is the most common foliar leaf disease we find at this point on corn. Rust does not survive northern winters and is brought up from the south on wind currents. With two consecutive very mild winters seeing rust early is not a surprise.

Also be on the lookout for any Northern Corn Leaf Blight and Grey Leaf Spot. Northern creates long cigar shaped lesions and is by far the most impactful foliar disease we face. Grey can be identified by small rectangular lesions. If the disease progresses rapidly the lesions can join together in larger blocks.

Yellow and slow developing beans are a very common sight this year. Two weeks of dry weather is the best recipe to fix but there are some nutritional opportunities we can take advantage of to help the crop.

Beans have an amazing ability to compensate for limited stand and early growth issues. It is a crop that is unwise to give up on mid season.

My farms have totaled over 2x rain from May 1 forward vs the 15 year average. Fields where we were able to spray early and add foliar nutrition look much better even with the excess moisture.

Consider adding foliar nutritional programs that contain leachable nutrients such as sulfur and boron along with the standard manganese. Products like Max-In ZMB and Max-In Sulfur provide the crop good nutrition and have shown excellent return.

Field above was sprayed with a strong residual program April 20. Planted May 24 – had 5.5” rain that night and had some replant added June 12. This is original stand. Point is to show the value we are delivering with sound weed control strategies including fall applied programs for marestail and burndown and residual programs in the spring to make foliar weed control more manageable. This farm has marestail, waterhemp, common rag and reasonable grass pressure.

Moisture and moderate temps are ideal to maximize corn yield at tassel/silk. Crop still has good potential despite ample acres of reduced stand.

September corn closed down 15 ¾ at $3.69 ¾ and December 17 corn closed down 15 ¾ at $3.83. August beans closed down 45 ¼ at $9.75 ½ and November 17 closed down 46 ½ at $9.87 ½. September wheat closed down 25 ¼ at $5.11 ¾ and July 18 closed down 21 ¼ at $5.69 ½. Crude oil closed up $.59 at $46.25.

“Shell-shock” was probably the most oft-used term to describe the markets today. Corn just didn’t seem to want to stop sinking, quickly dropping overnight, and gradually down-ticking throughout the day. The market ended up 15-16 cents lower, and has corrected $.35 off the highs made Tuesday night. The funds were viewed net sellers of 30,000 corn, which would put them back short roughly 75,000 in total. Without a doubt, we remain firmly rooted within weather markets. Today’s model runs confirmed the “wetter” bias put forth yesterday. The 6-10 day maps now also find broad precip for the Midwest, including some for the Western Belt. Quantities and locations will be very important, particularly given a continued “hot” bias throughout the outlook. We still would not call corn “safe” yet, but the market sure seemed to act like it today. Much of the Midwest will move into next week’s hotter and drier days with favorable soil moisture, but that will not be the case for South Dakota, Nebraska, southwestern Minnesota, portions of Iowa and parts of Illinois, where stress could negatively impact production. Export sales data this morning remained unremarkable for corn.

The soybean market collapsed as the newly acquired growing risk premium melted away on a less threatening shift in the weather outlook sending longs to the exits and new shorts piling on including the funds who were estimated sellers of -30k corn/beans. A 12-day rally off the low gave back nearly 50% in just two sessions in a text book ‘stairs on the way up and elevator on the way down’ trade. The weather forecasts are the key trigger to the sharp selloff. Forecasts went from hot and dry for the second half of July to slightly less hot with good moisture most excluding the lower corn belt in the 6-10 day and good moisture for most excluding western NE, KS and western half of the Dakotas in the 8-14 day. If this forecasts holds it will minimize the areas at risk of the heat with crops not in ideal shape but good enough heading into August which will be the key month for determining soybean yields along with early September. Soybean export sales came in at 683 mt which was above trade expectations.

The wheat complex started the evening lower, and remained weak throughout the night with trade entering the morning break double digits lower. The selling intensified during the day, with trade in HRW wheat getting to within one tick of limit down, and trade in SRW wheat getting to within a couple cents of limit down before settling a few cents off those lows. There was nothing friendly in the data from yesterday’s report and although the USDA did address some (but by no means all) of the issues for the Spring wheat crop, there is a chance that the correction today may be only the beginning. The recent rally across the complex has left the large funds long around 55 thousand contracts of KC (or 20% of open interest) as of last Tuesday and Mpls is into record open interest and record long levels. Export sales were in line with expectations, coming in at 358 MT.